Due to strong demand in the housing markets, prices remain stable despite interest rate hikes
For a long time, falling interest rates drove up demand for home ownership. After all, the lower the interest rates, the more affordable it was to finance a home. However, these low interest rates were also a factor behind the steadily rising real estate prices. Now interest rates are rising again, which could lead to falling prices for houses and apartments. This reversal of the trend is being slowed, however, by the limited supply of housing. Moreover, the first new construction projects are already being put on hold due to sharply rising costs and shortages of skilled labor and resources. Consequently, demand pressure on the housing markets in metropolitan regions remains high. As a result, real estate prices and rents continue to remain stable, as shown by a study from the German Institute for Economic Research (DIW Berlin).
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Clemens Paschke
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